Harvard cuts 275 jobs, cites drop in endowment

By IBT Staff Reporter On 06/24/09 AT 11:23 AM

Harvard University announced 275 job cuts on Tuesday, the latest cost-cutting measure at the world's richest university after the financial crisis triggered big losses in its multibillion-dollar endowment.

The Ivy League school took the action to meet budget constraints caused by an estimated 30 percent fall in its endowment for its 2009 fiscal year, ending June 30.

The cuts mostly affect administrative, clerical and technical jobs and will take place this week and next, Marilyn Hausammann, vice president for human resources, said in an e-mail to staff and faculty.

Another 40 staff were offered reduced work hours.

While the layoffs affect a fraction of Harvard's 16,000 staff and faculty, they illustrate the recession's toll on America's oldest institute of higher learning and other universities which depend on endowments and donations.

Harvard's endowment, which stood at $37 billion on June, 30 last year, tumbled to $29 billion by December and is projected to end this month at about $25 billion, hit by volatility in financial markets and a drop in donations. The endowment funded about a third of Harvard's operating budget in 2008.

Harvard has also taken other steps to cut costs, including keeping salaries flat for more than 9,000 faculty and staff in the 2009-10 academic year.

More than 500 staff opted for voluntary early retirement under a program offered earlier this year, said Harvard President Drew Faust. A 30-day external hiring freeze has been implemented for staff jobs.

All of the steps that we have taken to reduce spending over the past six months have been taken with the aim of sustaining the academic and organizational capabilities Harvard will need for the future, while minimizing the impact on our workforce, Hausammann said.

On average, U.S. colleges lost 24 percent of their endowments in the second half of last year, according to the Commonfund Institute, which polled 629 educational endowments.